Accident victims and their families can receive a tax-free income stream to pay for medical expenses, replace income lost or ensure future financial security.
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Structured settlements offer plaintiffs flexibility in establishing the payment schedule that best meets their needs, whether that`s starting off small and increasing over time, or decreasing as their needs decrease.
Tax-Free Income
Structured settlements allow injured parties to receive regular income instead of receiving a large lump sum that could be misappropriated. This allows people to cover living costs without depending on public support – another reason why government doesn`t tax structured settlements.
The Periodic Payment Settlement Act of 1982 encourages structured settlements for physical injury and wrongful death cases, while Congress extended their use for workers` compensation settlements as well. The Internal Revenue Code also contains tax benefits.
The Security of Your Own Home
The main advantage of structured settlements is the long-term financial stability. This can be especially helpful for people living with medical conditions that will need long-term treatment or care needs.
Structured settlements differ from lump sum awards because they are guaranteed and fixed by the insurance company issuing them. This is in contrast to lump-sum awards, which fluctuate with market fluctuations. Furthermore, most states protect these obligations through an insurance guaranty association in case an insurer declares bankruptcy.
A guarantee that payments will continue, no matter how the market changes, is a good way to protect against creditors and financial predators.
Flexibility
Structured settlements are a great way to pay for debts. You can choose from a variety of payment options, including monthly, quarterly, or annual payments.
Structured settlements offer another advantage by enabling you to adjust payments to suit your unique financial circumstances and future needs. For example, increasing payments if additional money is necessary in the future to cover medical bills or family needs could be advantageous.
Keep in mind the risks involved with structured settlements; for instance, selling it for a lump sum might cause you to forfeit certain tax benefits available under the Periodic Payment Settlement Act.
Reliability
Structured settlements provide your clients with guaranteed funds for a specific date and amount. They also meet both their short-term and long-term healthcare needs.
Reliability refers to the consistency of results from an experiment or measurement, for instance if you take multiple readings of someone`s weight measurement you should get the same reading each time.
It is important to keep reliability in mind when conducting research or designing tests. Make sure your questions and measurements don`t vary depending on the mood or concentration of participants.
Control
Structured settlements are more flexible than a lump-sum payment. You can invest, withdraw large amounts as needed, or use the money to make purchases.
Another major benefit of structured settlements is that they offer injured victims and their family members tax-free income. Thanks to the Periodic Payment Settlement Act of 1982, nearly all structured settlements from personal injury lawsuits are exempt from US federal income tax.
Structured settlements offer periodic payments (commonly known as annuity payments), which may come in either increasing, decreasing, or equal installments.
